Antitrust Limits to Cooperation in Syndicated Loans: Derivatives Rate Manipulation in Spain

April 2019

CPI Europe Column edited by Anna Tzanaki (Competition Policy International) & Juan Delgado (Global Economics Group) presents:

Antitrust Limits to Cooperation in Syndicated Loans: Derivatives Rate Manipulation in Spain By Diego Crespo & Marcelino Pajares (Marimón Abogados)1

Introduction: The CNMC’s Fining Decision

On 13 February 2018, the Spanish Competition Authority (Comisión Nacional de los Mercados y la Competencia “CNMC”) issued a decision in Case S/DC/0579/16, Financial derivatives fining four financial institutions (Santander, Sabadell, BBVA and CaixaBank) a total of 91 million Euros for an infringement of Article 1 of the Spanish Competition Act (Law 15/2007 of 3 July 2007) as well as of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) by manipulating the price of certain interest-rate financial derivatives.

The fined banks have appealed the CNMC’s decision in court.

The Affected Market

According to the Decision, the market affected by the infringement is project finance, which includes a variety of mechanisms used to finance large projects. The special feature of project finance is that a company is set up to manage the project requiring funds and to reimburse the loan with the income generated by such project. In such cases, due to the high volume of financing required, it is common practice to resort to long-term syndicated loans, i.e. loans involving several financial institutions, offering common terms and…

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